Summit needs quick wins and clear focus

China and UK have much to offer one another and together can drive the global economic agenda

President Xi Jinping's state visit to the United Kingdom in October is an excellent opportunity to reflect on the countries' current relationship and, just as importantly, focus on the areas of potential bilateral success.

Although China has the larger economy, we should view this as a relationship of equals.

Both countries have much to offer one another, China being a huge market in which UK firms of all sizes need to sell to, while the UK can offer much to China as it seeks to avoid the "middle income trap" and move up the value curve from mid to high income. Moreover, both countries can combine their resources to drive the global agenda in areas that can benefit the global economy.

I would like the UK-China Summit this month to prove an important milestone in cementing a sustainable long-term business, trading and financial relationship. To do this, it may require some quick wins, as well as a clear idea of the areas on which to focus.

China appears to view Germany as the economic and political powerhouse in Europe, while the UK is Europe's financial hub. For a quick win, there is a need to ensure China sees London as its offshore financial center, while in terms of long-term strategy China may need to accept that the UK has all the potential to displace Germany as the largest economy in Europe within the next 25 years.

In turn, the UK may need to assure China that whatever the outcome of the European Union referendum, the country will continue to be a regional leader and a global force.

China's investment in UK nuclear power has already received attention. The UK should welcome further Chinese inward investment into the Northern Powerhouse and into sectors where it would help boost UK productivity.

I would like to see China make London its overseas financial hub. This year, the UK took the decision to support the Asian Infrastructure Investment Bank at a time when other Western countries were holding back their endorsement. It makes sense for its European headquarters to be in London, as the bank seeks to fill the infrastructure investment gap across Asia by attracting capital from across the globe. China should also continue to support London's aim to be the main offshore center for the renminbi.

China will soon release its 13th Five-Year Plan (2016-2020), which like its predecessor will aim to move the economy further along up the value chain. This is challenging, but the UK can provide input and also should seek to maximize potential business opportunities in China.

Since Prime Minister David Cameron's visit to China at the end of 2013, the UK has been providing advice on how China can make the Shanghai Free Trade Zone model a success nationwide. It makes sense for the UK to leverage this. It is often said in the UK that Germany was best placed to benefit from China's infrastructure boom, but in China's next stage of development into services and stronger domestic demand, the UK should be well placed. Services have already overtaken manufacturing in China.

The summit needs to ensure a level playing field and maximum opportunities for UK firms investing in China as its service sector grows and its ambitious Belt and Road Initiative progresses.

There are many ways both countries can work together on the global agenda to push areas that can help improve governance and living standards. With China set to assume the presidency of the G20 next year, there are many possible options, including the environment and green agenda.

The anti-corruption agenda makes sense as one area for both countries to work together. The UK and China can take a global lead by agreeing on international standards to be applied by all countries in awarding global contracts.

The massive Belt and Road Initiative might be one area in which such standards could apply. Although the initiative, which aims to establish a Silk Road Economic Belt and a 21st Century Maritime Road, does not directly affect the UK, it covers regions housing two-thirds of the world's population. Let's hope that this provides opportunities for UK firms and highlights the ability of both China and the UK to work together in third markets.

In addition to its pre-eminent role in financial, legal and consultancy services, London's economy is also characterized by growing clusters in areas such as MedCity and medical research, in FinTech and financial technology and in its university sector. If the summit cements relations and boosts opportunities in these areas, too, that would be welcome.

In the past two years, bilateral relations have improved and this summit should build on that.

The author is the chief economic advisor to Mayor of London Boris Johnson and is a vice-chairman of the 48 Group, which focuses on boosting UK-China business ties. The views do not necessarily reflect those of China Daily.